With the number of smokers already declining, a tobacco tax would further reduce the number of smokers, thereby eroding the funding source.

To produce the revenues that Congress needs to fund SCHIP expansion through such a tax would require 22.4 million new smokers by 2017.

The tax will be paid mostly by the folks it is intended to help . . . "low income" and teens.

This brainchild comes from the same folks who find it prudent to stimulate the economy by going in to debt and funding programs for tattoo removal.

The Centers for Disease Control and Prevention estimates that each adult smoker costs approximately $3,702 annually in medical costs and lost productivity. If Congress is serious, the tens of millions of new smokers would be needed to sustain SCHIP funding. But assuming that a new cohort of smokers would somehow materialize, the privately insured, as well as the taxpayers, would also carry a correspondingly heavier burden, as most of the additional costs would be shifted to them through higher insurance premiums.

Government is taking over banks, insurance companies and auto makers. Now they want more people to smoke so they can fund health care.

Somehow I miss the logic here.

This isn't rocket surgery.

BTW, the tobacco tax increases by $0.61 per pack on April 1. If you want to protest, stock up today.

InsureBlog posts are often found in the MOST interesting places. Here are two this week - -

1. Carnival of Personal Finance, hosted by Wide Open Wallet, features a classic post from InsureBlog’s own Bob Vineyard. How would feel about a $1 surcharge to your bill to help your waiter buy health insurance?

Find Bob by scrolling down to Budgeting and Saving - and while you're there, read the whole thing.

2. Grand Rounds is hosted by Running a Hospital - this one is grand and it’s certainly round – as in fully-packed. The theme: transparency in the delivery of clinical care. It is a looong and thought-provoking Grand Rounds and once again InsureBlog is a contributor:

InsureBlog's Henry Stern tells the true story of the Italian doc whose dedication to his patient overrode his own immediate health crisis.

Scroll down to Hank’s entry and, as above, enjoy your read along the way.

As in many places, the economy has taken a toll on Pocatello High School. Teachers still need to teach, of course, and many (most?) are willing to dig into their own pockets to fund special projects. Still, when even paper for tests and handouts is in short supply, creative, out-of-the-box thinking is called for.

Or is it?

"It crosses a line," said Susan Linn, a Harvard psychologist and director of the Campaign for a Commercial-Free Childhood. "When teachers start becoming pitchmen for products, children suffer and their education suffers as well."

Do they?

I'd like to know what our readers think of this novel approach to education.

As noted recently, the unlikely (but unfortunately true) story of how opting out of Medicare can adversely affect one's Social Security payments is heating up (for background, click here and here). Briefly, a group of fellow citizens has filed suit against the Fed's because Social Security officials claim that folks must forfeit their Social Security benefits if they withdraw from (or choose not to enroll in) Medicare. This seemed like a fairly important story, yet seems to have flown completely under the MSM radar.

Which is where we come in:

I had a very helpful conversation the other day with lead attorney Kent Brown. Mr Brown's been practicing law for some 35 years, focusing primarily on fighting government meddling in the health care industry. Not coincidentally, he was also the lead attorney in the case to force open then-First Lady Hillary Clinton's closed-door health care task force.

I asked Mr Brown how he came to be associated with this case, and he told me that he was initially contacted by Brian Hall, a gentleman who chose to opt out of Medicare coverage once he became eligible. Mr Hall was told that he could, of course, choose to do so, but at the cost of his Social Security benefits. This didn't seem fair, and so he approached Mr Brown to see if there was any legal recourse. The case has snowballed, and there are now five plaintiffs (including Former House Majority Leader Dick Armey).

Why, though, would someone choose to forgo health coverage for which one has already paid? Opting out of Medicare may be legal, but is it smart? Mr Brown explained that there are many reasons why someone might choose to decline it, including the desire to make one's own health care decisions without government intervention. Folks see what's happening in England, for example, and want no part of that.

Basically, it comes down to choices: some (many?) folks want no part of a system that allows the government to dictate their health care alternatives. Then, too, there's the matter of privacy, which is also a concern for many of these folks.

So why was the Social Security Administration telling Mr Hall that it was all or nothing? Is there something in the original Medicare legislation that dictated this? Surprisingly, the answer is no. Social Security states that one who is 62 years old and otherwise eligible "shall be entitled to" Medicare [ed: this was obviously added after the initial legislation, which of course predates Medicare]. Nothing in the Social Security or Medicare statutes state that one must take Medicare in order to receive Social Security payments (or vice versa). There are explicit conditions set forth under which one might lose Social Security benefits, but lack of a Medicare card isn't among them.

So how did this come about? Well, according to Mr Brown, there are three provisions in the Social Security Program operating manual that bear on this subject; it's important to note, though, that these are not laws or even regulations. This came about not by statute, but by bureaucratic fiat. The first two of these provisions were inserted in August of 1993 [ed: interesting timing, no?], and the last one in 2002.

The case is moving along; the most recent development is the one which caught my eye earlier this week: the government has filed a routine motion to dismiss, and Mr Brown has countered with one for summary judgment. The judge has set a May 22nd date to hear arguments regarding the motion to dismiss; if that motion is quashed, the government will be given time to respond to the motion for summary judgment. That will probably be in late summer.

I had to ask, and so I did: what happens if the judge grants the government's motion to dismiss? Mr Brown quickly replied that they'd go right to the Appeals Court; the plaintiffs are totally committed to this fight. He also noted that the judge is quite well versed in the subject area, and has her own wry sense of humor (and irony). We agreed that a quote from her would be just the thing with which to conclude this post:

"It is passing strange that the Social Security Administration would insist on individuals being forced to enroll in one bankrupt program in order to be in another one that overruns its budget."

Thursday, March 26, 2009

That's the question raised by the New York Post. For the record, let us note that we are truly sorry for her family's loss, and wish to score no "points" from this tragedy. Still, it may be worth examining the premise of the allegations to see if those who advocate that we should adopt such a system are justified.

"About three hours after the accident, the actress was taken to Centre Hospitalier Laurentien, in Sainte-Agathe-des-Monts, 25 miles from the resort ... But Sainte-Agathe-des-Monts is a town of 9,000 people. Its hospital doesn't have specialized neurology or trauma services. It hasn't been reported whether the hospital has a CT scanner, but CT scanners are less common in Canada[than in the US]."

I read some years ago that there were more MRI machines in Ohio than in all of Canada; I don't know whether that's still the case. But a system that relies on government largesse is unlikely to be profligate with "the tech."

And there's this:

"Quebec has no helicopter services to trauma centers in Montreal. Richardson was transferred by ambulance to Hospital du Sacre-Coeur, a trauma center 50 miles away in Montreal -- a further delay of over an hour."

That hour might have been key: after a certain interval, it seems that a less-than-optimal outcome is essentially inevitable. According to the Post, she didn't receive necessary care until some six hours after the incident, which drastically reduced her chances of survival.

For once, though, I'm willing to cut "CanCare" a break: it appears that, immediately following the initial incident, she was conscious and ambulatory, and appeared to be okay. I'm told that this is fairly common with this kind of head trauma (it helps to have a surgeon in the family). Obviously, just appearing to be okay was deceiving, but what else were those on the scene to do? She was a grown woman, not a child, and presumably able to make decisions regarding her own care.

Many may not know it, but Medicaid covers dental care. This taxpayer funded program for low income people has pretty good benefits . . . if you can find a dentist willing to accept the low reimbursement levels.

In Georgia the number that seems most accurate hovers around 4% of dentists are willing to treat Medicaid patients.

Apparently there are some dentists in New York who are more than happy to treat Medicaid patients.

Earlier this year, auditors from the state comptroller’s office noticed that a Brooklyn dentist, Dr. Alan Zukor, had billed Medicaid for giving several patients fillings for all 32 of their teeth on a single day.

When they looked a little closer, they noticed that in several of the cases, Dr. Zukor had also submitted a claim for pulling those same teeth — all of them — from the same patients. The records seemed to show a bizarre and painful waste of dental care.

The bizarre part I get. It is the painful portion I don't.

“The human mouth typically holds 32 teeth,” Mr. DiNapoli said in a statement. “Billing Medicaid for filling and then pulling all 32 teeth from seven different patients within a few weeks should have raised a red flag.”

Red flag? Yes, you would think . . .

According to Mr. DiNapoli, in one instance, Dr. Zukor claimed he filled 30 teeth for one patient in two office visits. On a single day in January 2008, he claimed he filled 243 teeth for 18 patients; a month later, in February, he claimed he extracted 256 teeth from eight patients, or 32 teeth per patient.

Jewish people refer to this as Chutzpah.

I just call it incredibly stupid.

But apparently this is not the only N.Y. dentist who is creative in his Medicaid billing.

Auditors identified almost 22,000 questionable services for about 6,500 patients with dentures during the five-year period ending June 30, 2008. That included almost 1,500 dentists who billed Medicaid $863,000 for cleanings, fillings, extractions and X-rays for about 5,000 patients with full dentures.

Wednesday, March 25, 2009

We've busted the "Myth of the 46 Million" (or 47 million, or, well, pick a number) many times here at IB, but we're always happy to keep kicking that particular canard as many times as necessary. In 2007, according to the Census Bureau, there were some 46 million folks here in the States without health insurance. Of course, as we've also pointed out countless times, being without health insurance does not mean being without access to health care.

But I digress.

The problem with that number is that it's meaningless: for one thing, almost 10 million of those folks (over 20%) aren't even citizens. That leaves something like 36 million Americans who are uninsured.

That is, the survey takes place in February, and has no way to adjust for the fact that many (most?) of these folks will have coverage in place sometime in the next 10 months. Or, they might reply that, although they're currently covered, they were uninsured at least part of the previous year and, voila, they're "uninsured."

And of course there's the issue of why they're uninsured. Many folks believe, erroneously, that they can't afford even catastrophic health coverage. And finally, there are those folks who qualify for government coverage (Medicare/Medicaid) who for whatever reason opt out (or are unaware of the availability).

That's an amalgam of two seemingly disparate acronyms; this bleeding edge technology is designed to help those of the "Y Chromosome" set more effectively and pleasantly interact with those who sport the "Double X." Specifically:

Modeled after other social networking sites (e.g. Twitter, FaceBook, etc), this may be the ultimate expression of MySpace. And it's certainly swelling: enrollment topped 150,000 last month, of which almost 15,000 are of the aforementioned "Double X" persuasion (although those numbers may be padded).

Although the service started off using email technology, founder Jordan Eisenberg has upped the ante by introducing a phone-based PMSsaging system, as well. The purported demographic for the site is men aged 20 to 40. But as mentioned above, a lot of females are using it, too; Eisenberg warns, though, that this method isn't for tracking fertility.

Now, an ordinary surgeon might have stepped aside, and tended to his own immediate medical needs. Not Dr Claudio Vitale (no apparent relation):

"I couldn't leave him at such a delicate moment ...I'm not a hero, I only did my duty."

I think most of us would beg to differ. There's a big difference between a headache and a heart attack, and one could easily be forgiven for immediately addressing the latter. Dr Vitale, though, was having none of that:

"Vitale suffered chest pains while he was halfway through the brain op but refused his team's efforts to persuade him to get emergency treatment."

The good news is that both the surgeon and his patient are "already on the mend."

I also made the point that were such a bill to become law, it would be challenging (to put it mildly) to find competent executives to help right the listing ship of industry; after all, "who wants to take that job for free?"

USA Todayis reporting that the health insurance industry is offering " to curb its controversial practice of charging higher premiums to people with a history of medical problems."

That's the good news.

Now the bad news.

EVERYONE pays a higher premium. Based on what we see in states that prohibit medical underwriting, expect rates to be 200% - 300% higher.

two insurance industry groups said their members are willing to "phase out the practice of varying premiums based on health status in the individual market" if all Americans are required to get coverage.

So now everyone will be required to have coverage, much like the way auto insurance is handled in most states. Of course there is a difference with auto. High risk individuals can only get coverage through SR-22 programs.

Does this mean a similar plan will evolve for health insurance?

And if 48,000,000 can't afford health insurance now (most are insurable), how will they afford it when it is mandated?

The companies left themselves several outs, however. The letter said they would still charge different premiums based on such factors as age, place of residence, family size and benefits package.

This is an "out?"

Seems to me auto insurance carriers charge different rates based on the type of car you drive, where you live, your driving record . . .

Are these considered "outs" as well?

Small employers who offer coverage can see their premiums zoom up from one year to the next, even if just one worker or family member gets seriously ill.

When I first read this, I thought my eyes were deceiving me. Can it be true that the Golden Gate (as in San Francisco) Restaurant Association has actually filed a suit to STOP the city from requiring employers to provide health insurance?

Deputy City Attorney Vince Chhabria said he'll file a response to the emergency request by March 27 and said the court could rule that same day.

"I think their motion is frivolous," Chhabria said. "GGRA's goal of taking away health care from tens of thousands of workers does not constitute an emergency that would require immediate Supreme Court attention."

This begs the question, which is more important? Job's or health insurance.

Of course Chhabria is clearly not a regular reader of InsureBlog or else he would know that lack of health insurance is not the same as lack of health care. Plenty of people obtain health care without the benefit of health insurance.

I have a problem with government intervention in the free market. If an employer CHOOSES to provide health insurance as a benefit, that is their prerogative. Same if they opt not to provide insurance.

In much the same way, if an employee wants a job that comes with health insurance they should seek out those jobs and bypass the ones that do not meet their need.

One restaurant has a novel idea that I like. They have what amounts to a tip jar to cover the cost of health insurance.

At the bustling French bistro Zazie in San Francisco's Cole Valley, one dollar goes a long way. That's how much owner Jennifer Piallat charges each customer to pay for health care for her 32 employees.

The dollars add up to about $11,000 a month - enough to provide Kaiser Permanente medical insurance, dental insurance and a 4 percent employer match on 401(k) retirement accounts.

How do customers react to the surcharge?

She said only 1 percent of her customers have complained about the surcharge. "And they were the 1 percent we didn't want to come back anyway," she said.

Also keep in mind that this hospital was repeatedly cited as a model of health care, lauded for its "elite foundation status and[continuing] to receive positive annual reports." Which begs the question: if this is the expected level of care at an elite facility, what must it be like at "normal" ones?

the U.S. Agency for International Development, which has distributed an estimated 10 billion U.S.-made AIDS-preventing condoms in poor countries around the world.

But not anymore.

They will still be handing out condoms, just not ones made in the United States.

In a move expected to cost 300 American jobs, the government is switching to cheaper off-shore condoms, including some made in China.

Outsourcing condoms. What is the world coming to?

"Of course, we considered how many U.S. jobs would be affected by this move,” said a USAID official who spoke on the condition that he would not be named. But he said the reasons for the change included lower prices (2 cents versus more than 5 cents for U.S.-made condoms) and the fact that Congress dropped “buy American language” in a recent appropriations bill.

Makes you wonder how effective is a 2 cent condom?

Or a nickel one for that matter.

Besides, he said, the sole U.S. supplier — an Alabama company called Alatech — had previous delivery problems under the program.

Delivery problems. Probably a joke in there somewhere but this is serious business.

It's clear that Alatech's problems over the years, which apparently have been resolved, may have driven U.S. officials to seek much less expensive foreign-made condoms in the first place.

But that's cold comfort to Fannie Thomas, who has been making AIDS-preventing condoms in southeastern Alabama for nearly 40 years in the small town of Eufaula.

When the company loses this contract the plant will have no choice but to shut down, putting some 300 people, including Fannie Thomas, out of work.

"The plaintiffs ... urged the court late last week to reject government efforts to have the case dismissed ... the plaintiffs asked the court to grant their request for summary judgment and to issue a permanent injunction barring enforcement of the illegal regulations."

So it appears that the lawsuit is still alive, and plodding forward. I've asked the group's contact person if I could interview one of the folks litigating the suit. We'll continue to keep you posted on this unique, and perhaps important, situation.

Medical marijuana has been the butt of jokes for some time. The use of marijuana to offset the side effects of chemo is well known but only legal in a few jurisdictions.

But it seems the new Washington regime is sending a message there is a new sheriff in town and he is here to clean things up.

The Obama administration isn’t going to bust stores that are following state laws allowing the sale of marijuana when approved for use by a doctor. But the DOJ will go after stores being used as fronts for drug dealers, Attorney General Eric Holder said yesterday.

It’s been clear for a while that the Obama administration would depart from the Bush administration’s practices of using the DEA to bust marijuana dispensaries that officials said were following state law but violating federal law, which doesn’t recognize a medical use of marijuana.

So who has jurisdiction here? The feds and the DEA or the state of Cah-lee-for-neeah?

According to U.S. Attorney General Eric Holder . . .

The policy is to go after those people who violate both federal and state law, to the extent that people do that and try to use medical marijuana laws as a shield for activity that is not designed to comport with what the intention was of the state law. Those are the organizations, the people, that we will target. And that is consistent with what the president said during the campaign.

Friday, March 20, 2009

1) The bonuses themselves comprise an inconsequential amount of the total AIG bailout (now approaching the $170 Billion mark)

2) They represent a promise to AIG employees to stay on during a time of extreme turbulence, with little hope of career advancement in the firm or elsewhere (indeed, one might be tempted to forgo mentioning one's tenure at AIG altogether). In fact, the affected employees weren't even in the division of AIG that contributed (caused?) the melt-down.

3) Congress knew of these bonuses well in advance (cf: the Dodd Amendment)

Actually, I'm with Sen Dodd (D-CT) on this: these folks should be well compensated for their service.

Now, these same Congresscritters have passed a clearly unconstitutional bill in an effort to clean up a mess of their own making. This is not just bad law, it is bad business practice: why would anyone take such a job, knowing that the compensation promised to them could be revoked at the slightest whim? This is why CEO's insist on, and get, "golden parachutes:" to entice them to come aboard a potentially sinking ship, in order to try to their best to salvage what they can.

Which brings up the next problem: we now own 80% of a failing financial giant, which is in desparate need of competent, expert helmsmanship, and we've just announced that whatever sucker takes the job can't rely on being adequately compensated for it. That's dangerous and stupid.

What happens when the next AIG falls through the floor? Will we bail them out, too? And how are we going to guarantee whomever is tapped to bring them up to snuff that they're not working pro bono?

I'll reiterate that we should never have bailed out AIG in the first place, but essentially shooting the messengers isn't going to get us out of this mess. We now own 80% of the firm, and the government now has a fiduciary responsibility to the shareholders (that's thee and me, fellow taxpayer) to do all in its power to empower AIG to right itself. That's not going to happen if it can't attract, much less retain, the caliber of executive necessary to turn things around.

Wednesday, March 18, 2009

■ COBRA/ARRA: From the mailbag, we get this inquiry from Pete Peterson:

"Has anyone addressed the Pre-x issue concerning the new law. For example it seems that an employee could be involuntary terminated without paying the premium for 5 months, then come back on the plan by paying 35% of one months premium, have both knees replaced with no pre-x conditions because the creditable coverage period does not apply.

If the participant discontinues coverage after one month the adverse carrier risk is brutal to say the least."

Unfortunately (for the carrier, at least), this is correct. ARRA defines a "late-electing person" as one who had previously been offered, and rejected, COBRA extension, and who subsequently became eligible under the new rules [ed: new "rules?" Are they really "rules" if they can be changed on a whim?]. Such a person could, indeed hop back on the plan by simply paying their portion of one month's premium, have such a procedure, then bail.

As a practical matter, though, I'm not convinced that this will be a common occurrence. For one thing, they'll still have their deductible and co-insurance, and the pre-cert requirements may well take longer than the person would have under this one-month scenario. Also, any such procudure is likely to require follow-up care, not to mention rehab, which would also take at least a few months.

■ Aetna/Humana: FoIB Rick emails that this is more likely to be a distraction than a certainty; it seems that there's more happening under the radar than in plain sight:

Rick explains that "Availity is working towards -- and in testing in selected Florida markets has actually achieved -- real-time claims adjudication, the Holy Grail of claims processing." One of the challenges of Consumer Driven Health Plans (e.g. HSA) is lack of hard data at time of service. Since there's no co-pay, and the provider generally has no real idea of what that claim will really cost (after repricing and depending on deductible and/or co-insurance), most folks leave the office parting with no cash. The doc then has to wait for the claim to be processed for payment to be received, from either the insured or the carrier (or some combination of the two).

A system that allows the provider to immediately know how much to collect from a patient, and the patient immediately knows what the service will cost, is a major step towards more transparent health care delivery. This is a good thing.

In related news, however, Rick reports that the aforementioned partnership now adds up to almost 50 million "medical lives, not counting Part D standalone or Med supp members, from the first, fourth, seventh and thirteenth largest insurers in the country. Hmmm. The words "too big to fail" come to mind, and not necessarily in a good way."

A year ago, I would have pooh-poohed such sentiments, but based on the AIG and Big 3 fiascos, I'm not so quick to dismiss this concern. On the other hand, there's not much we can do about it (even if we wanted to) except to hope for the best.

Back in the day, State Farm agents were famed for handing out free road atlases (atlasi?) to new and prospective insureds. Recently, though, they've done some image modification, and traded in maps for toys.

One of my very favorite sci-fi authors, Robert A Heinlein, wrote a haunting short story about a scientist, Pinero, who discovered a means to literally and accurately determine one's date of death. Called "Life-Line," it was RAH's very first published story.

Today, actuaries and underwriters use "Mortality Tables" to guesstimate how long one might live. These are based not on the length of one's "world line," but the Law of Large Numbers. Obviously, an underwriter has no idea when you are going to die, just the likelihood of it in a certain timeframe.

Now, the folks at The Quiet Company have come up with their own version of Dr Pinero's device. Called the "LifeSpan Calculator," one answers a series of questions, and the LSC calculates how many years one has left on this mortal coil. It even offers suggestions on how to improve that number. It took me only a few moments to calculate my likely lifespan, and the questions were quite user-friendly.

Tuesday, March 17, 2009

I haven't commented on the recent kerfluffle regarding the massive bonuses planned for the former insurance behemoth's executive squad, primarily because there doesn't seem to be any need to: it's getting quite enough play in the press.

But it seems to me that remaining silent might be construed as condoning the idea, and that, of course, will not do. So, for the record, while I don't believe that these execs should be forced to commit hari kiri, I do think that any bonuses should be remanded forthwith to the federal treasury, and used to help pay off the carrier's massive debt to the citizenry.

Well hey, it wouldn't be any fun if we agreed ALL the time. I think Bob's quite correct that there are other, perhaps larger issues at stake here. But it seems to me that even the appearance of impropriety, especially on such a volatile issue, is cause for a hard look.

Although this is probably irrelevant, it should also be noted that Senator Dodd (D-CT) "was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org."

Because all of those cancer patients taking part in the trial "will have the option to continue taking Sutent or be switched from placebo to Sutent." One presumes that those on the placebo will opt for the "real thing," but I wonder if any of the patients experienced the "placebo effect."

Next up, good news for those who worry about suffering from Alzheimer's (or are concerned about loved ones who might):

This new test looks at the proteins in one's spinal fluid; these proteins are believed to be an indicator of Alzheimer's. The test itself was shown to be effective in almost 9 cases out of 10, accurately "predicting which patients with early memory problems and other symptoms of cognitive impairment would eventually be diagnosed with Alzheimer's."

Of course, any good news in this area is welcome, but it's important to remember that this is a predictor, not a cure.

Third, FoIB Holly Robinson emailed this link announcing some good news about ovarian cancer screenings. This dread disease is considered quite treatable if caught in the early stages, but only about 25% of these invasive cancers are detected then. A new study seems to show much promise, claiming that "postmenopausal women who are screened for ovarian cancer either by transvaginal ultrasound scan or by a blood test followed by a scan are more likely to have their cancers detected at early stages, with almost half the cancers picked up before they had spread beyond the pelvis."

Monday, March 16, 2009

Georgia health insurance recently posted on a rumored plan to save taxpayer dollars by requiring Vet's to pay for their own health care. We were incredulous but somewhat comforted by the thought this plan will never get off the ground.

Perhaps we were a bit hasty . . .

"It became apparent during our discussion today that the President intends to move forward with this unreasonable plan," said Commander David K. Rehbein of The American Legion. "He says he is looking to generate $540-million by this method, but refused to hear arguments about the moral and government-avowed obligations that would be compromised by it."

Update 1:IF this merger takes place, it does make some sense. There's a synergy that the two carriers would offer since, combined, they'd be in pretty much the same league as the Big Boys (WellPoint and UHC). Also, this might help to solve one of Humana's problems (network issues) and, perhaps, some of Aetna's (lack of ability to actually write business). More later.

"Folks in high deductible plans don't really use the online resources available to them any more than those with co-pay plans do."

The results of the study shatter every single one of these. It's important to note that the carriers themselves are apt to be quite objective when undertaking these studies. After all, they're not trying to get folks to switch from another carrier, only to determine whether or not their own products are serving the needs of their insureds. This is important in assessing the validity and bias of such studies.

What Aetna found was fascinating, and extremely good news for those of us who advocate more Consumer Driven Health Care (CDHC):

Turns out that insureds in CDH Plans seek out "preventive care more often than the control matched PPO population. Furthermore, Aetna HealthFund members had 10 percent lower primary care physician utilization for non-routine services and 15 percent lower utilization of specialist care" than those in co-pay plans.

Also, these folks "(a)ccess the same or higher levels of screenings for diabetes and breast and cervical cancer, compared to members in traditional PPO products."

And they use "the prescription drugs necessary to treat chronic conditions such as diabetes, congestive heart failure, coronary artery disease and high cholesterol at similar or higher rates than PPO members."

Finally, folks with "skin in the game" utilize those "consumer tools and information ... at twice the rate compared to PPO members."

Game, set and match.

Now, this isn't to say that CDH plans are a panacea, as they clearly are not. But it should lay to rest the most often heard objections to their use. The one issue which the study didn't seem to address was cost-differential with regard to co-pay plans, and between various out-of-pocket levels of HDHP's. I still think that carreirs need to look at these results as indicative of High Deductible Plans' ability to keep costs down and insureds healthy, and thus put some downward pressure on pricing of these plans.

My father never was the picture of health. He smoked, he drank, and he ate things that most people wouldn’t touch unless they had to break into the box marked “Survival Kit - Last Option.” Vienna sausage does not a meal make. He constantly had some manner of cold, cough, or other malady, and we never really thought much of it. Normally, he would shuffle around for a few days, then get back to life. So, at Thanksgiving 2006 we didn’t really think anything of it when Chock developed a nagging cough that just wouldn’t go away.

By Christmas 2006, it still hadn’t gone away. He was also beginning to have some balance issues, some troubles with his memory, and was tripping over words. He didn’t want to see a doctor - half because he didn’t want to believe something could be wrong, and half because he just wasn’t the type to go to see someone until limbs were actively falling off.

He got progressively worse over the next few months and eventually couldn’t deny the fact that he truly needed to go see a doctor. It was May 9th, 2007 - my parents’ 32nd wedding anniversary - when he was formally diagnosed with Stage IV cancer (brain, lung, bone, blood, and colon). He started aggressive chemotherapy on May 13th, his 71st birthday.

On July 19th, 2007, at 12:40 in the morning, my father died. Very shortly thereafter, we realized that we had some serious problems.

You see, before Chock passed away, he had had a brain tumor the size of a baseball. His mental faculties were somewhat impaired, to say the least, and so some of his last financial decisions were...less than rational. Just before he passed, in one of his last moments of lucidity, he told my mother “I’m sorry, Jo. But I sure am glad I’m not going to have to be the one who has to clean up the mess I made.”

And holy crap, was he right. When Chock died, the bills hit us hard. Chemo had cost $8,000 a round. The cost of his two-month hospital stay in a private room was astronomical. Numerous tests, multiple labs, home hospice care, none of it was cheap. The $1,000 a month my family was paying for his “insurance” had drained us as well - the only thing that “defined benefit” plan defined was exactly what position we were expected to take as we were screwed. Add to that his already extant debt, and we were in deep.

Did I mention that this was all piled on top of my mother’s medical bills? She’s been handicapped for fifteen years with Meinere’s disease. Twenty-three surgeries haven’t been cheap - especially when several of them were excluded from coverage as “experimental procedures.”

Now, let’s make matters worse. Before Chock passed away, he told us that he had a $250,000 life insurance policy through New York Life. Well, that was partly true - at one time, yes, he had life insurance through NYL. The tumor that was altering his speech was also mixing up the chronological order of his memories. Tracing the money flow would reveal that the policy had lapsed years and years ago when he had pulled all the cash value out.

I always wondered how he had been able to afford that boat.

The average American family declares bankruptcy at $11,000-ish of debt. We were in to the tune of $167,000 (before funeral costs) with no life insurance coming.

If you’ll recall, mid-2007 was around the time the real estate market had really settled into its free-fall. My mother’s only option was to sell the house that she and my father had lived in together for thirty-two years. There was no such thing as a quick sell in that market, and the process was torturous. We couldn’t afford storage, and we had to clean out a massive amount of my father’s things in a short period of time to prepare the house for sale. I drove twelve hours round-trip every weekend for months, coming home from college to help my mother throw out over thirty years of memories. It was easily as depressing as sitting next to my father’s bed while he died.

Though we watched the money as closely as possible, there was only so much of it - and it was running out. By the time the house sold, my mother would later tell me, she had about thirty days of cash left before she would have had to declare bankruptcy. And when it sold, it did so for $75,000 under its appraised value.

Now, sad though that story was, it has a happier ending than most. My mother lives in Alabama now, back where she grew up. Between her disability, teacher retirement, and social security, she has enough to get by each month and put some back in savings. And I have a new career path than the one I originally envisioned. I sell insurance now, and I know that there’s not a single person that I work with who will ever find themselves in the situation that my family was in. I’m saving the world, one policy at a time.

This story has several morals worth remembering:

Don’t count on the ability to sell your assets in the event of a death in the family to float you. It might not come through in time, it’s painful, and you’re not going to be in any sort of position to get yourself in a positive bargaining position.

Life insurance does more than provide a bit of money upon a death. It allows the survivors time to grieve in dignity instead of spending sleepless nights throwing out years of accumulated memories.

That $2000 prescription drug cap might not seem like such a big deal when you’re taking a z-pack once every two years for a sinus infection. It’s a huge deal when you’re staring down $8,000 a day of chemotherapy drugs.

Plan for the worst when things are good. You’re rational, you’re calm, and you can think clearly. If you wait until the crap has already hit the fan, you’re going to end up scrambling - like we did.

Don’t just buy insurance. Hire an agent, and make it someone you trust. Talk to them. There are a few insurance agents that give us all a bad name, but I promise, some of us truly do care about keeping your family safe.Nick Perry

(Nick is a friend, and fellow agent in the Atlanta area. He is wise beyond his years. Perhaps that is because he has lived through things most of us never want to think of, and pray we never experience).

Sunday, March 15, 2009

This article from the WSJ Health Blog reports the progress of Golden Gate Restaurant Association v. City of San Francisco. The Supreme Court has now agreed to hear an appeal from the judgment of the Ninth Circuit Court of Appeals, which reversed the original trial court’s decision.

IMO, Golden Gate Restaurant Association wins in the Supreme Court, and the City loses. The Ninth Circuit is frequently reversed.

The WSJ article fails to clarify a frequent misrepresentation in the media about the fundamental legal issue in this case. Specifically, the fundamental issue is regulation of “insurance plans” vs the regulation of "ERISA plans”. This distinction is essential to understand.

An insurance plan operates under a contract of insurance issued by an insurance company. The States are authorized to regulate insurers and the business of insurance. In contrast, an ERISA benefit plan is provided under a contract of administrative services only. In an ERISA plan, there is is no contract of insurance, no insurance company, and no insurance premiums. These plans are called ERISA plans because they are regulated by the Federal law called ERISA.

Most of the largest employers/plan sponsors, nationally and in San Francisco, manage their employee benefits thru ERISA plans. I think the Restaurant Association does the same and therefore the fundamental premise of their objection is that their plan is not subject to regulation by the City or the State. (If otherwise, I doubt the Association would have chosen to incur the expense of a trial and, now, two appeals. I also believe the Supreme Court would not waste its time if this were about an insurance plan – which the States have clear authority to regulate.)

I believe the City attorneys understand the law - but the City went ahead anyway. Why? I think because, if ERISA plans are ruled exempt from the requirements and tax the City wants to impose, then the City’s ability to manage its scheme of insurance for the uninsured would be greatly diminished. I understand the City's motivation. I just think the City is wrong on the law.

I use Assurity primarily for blue and gray collar disability income plans. These are typically folks whom the "Big Boys" eschew in favor of doctors, lawyers and politicians. The particular case which has earned Assurity its place in the pantheon of "Good Guys" is somewhat unique:

Mike [ed: not his real name] works for a company which has tasked him with two seemingly unrelated jobs: one is inside sales, with little chance of major injury; the other involves some pretty hefty manual labor "out in the field." One of the primary factors in disability insurance pricing is occupation: more "hands on" jobs generate higher premiums. Because I tend to be fairly conservative in quoting policies, I erred on the side of caution and assigned Mike's case a relatively low occupation class, which resulted in a sizeable (but still reasonable) premium. I submitted his completed application, and waited.

A week or so later, I received an email from Assurity informing me of two things: first, that I had used an outdated app (my fault for not checking the date), which necessitated Mike having to complete a new one (not a huge deal, but my bad).

The second item regarded his occupation class: in reviewing the application, the underwriter noticed the dual jobs, and asked me to confirm with Mike more precisely the division of his labors. The underwriter felt that Mike may well qualify for a lower rate. So while Mike was re-completing the application, I had him be more precise in describing his typical day. We sent that off, and awaited an answer.

When the policy arrived, I was, to put it mildly, pleasantly surprised to see that the premium was reduced by some 40 percent; Mike had indeed qualified for the higher job classification.

This is an example of a carrier not just doing the right thing, but actively engaged in doing so. It is obviously a big part of their corporate culture. I pay little (if any) attention to carriers' "mission statements;" rather, I look at how they do business. It's obvious that Assurity looks for ways to make it easier on their clients (and would-be clients), and for that, they earn an IB Treat.

Like a lot of other things in the news lately, my initial reaction is, "they are kidding, right?".

No official proposal to create such a program has been announced publicly, but veterans groups wrote a pre-emptive letter last week to President Obama voicing their opposition to the idea after hearing the plan was under consideration.

The groups also cited an increase in "third-party collections" estimated in the 2010 budget proposal -- something they said could be achieved only if the Veterans Administration started billing for service-related injuries.

Let me see if I understand.

We have an all volunteer army. Everyone who enlists does so willingly because of a desire to serve their country. They knowingly put themselves in harm's way. Their reward is . . . pay for your own damn health care.

Asked about the proposal, (VA Affairs Secretary) Shinseki said it was under "consideration."

"A final decision hasn't been made yet," he said.

Under consideration. So this is one way Obamaman wants to save money and pull us out of a nosediving economy?

Recently, the British health service has been trying to cut wait times for patients, enjoying modest success in that endeavor. But "two steps forward, one step back" seems to be the order of the day, as new rules will limit "junior doctor's" work week, cutting them by some 15%. These new rules, called the European Working Time Directive [ed: insert punchline here], severely curtail how many hours physicians can work, and thus patients' access is reduced, as well.

Of course, when the gummint runs health care, these are the kinds of things that will happen, regardless of the consequences to the public. One might presume that our own providers would chaff under such a system, but I'm not convinced. In the event, this results in even less health care for our cousins Across the Pond:

"It means patients will have to wait months for routine operations as surgeons prioritise emergencies rather than scheduled cases."

These reductions translate into real lossses, since it's estimated that the average hospital will lose the equivalent of three interns. This is, of course, rationing of health care, which may well be necessary to reduce costs. The question is whether we'd be satisfied wth a system that essentially dictated how many hours a provider could work. That seems to be rather shortsighted.

Insurance giant Aetna released a report which is a poor reflection on our ability as agents to get the word out.

With unemployment exceeding 8%, thousands are finding themselves out of work and (apparently) no clue about their health insurance options.

The survey found that 69 percent of consumers had never heard of individual health insurance plans or did not know much about them. While general awareness of COBRA plans was higher, 38 percent of respondents said they expected to pay the same premiums as when they were employed.

Some of the blame can lie at the feet of employers who rarely do enough to educate their workforce on the value of health insurance benefits. But I find it almost incredulous that 69% have never heard of individual insurance plans.

My initial reaction is, you're kidding, right?

Forget that I get regular calls from people complaining that their employer health insurance deductions for their family of 9 is increasing from $15 per week to $20 per week and saying they need something cheaper. Or the calls from those with sticker shock who got their COBRA notice, and the $1400 monthly price tag, and wondering what they can pick up that will cover their 13 monthly medications.

But to have never HEARD of individual health insurance?

Of course recent changes in COBRA as amended by ARRA will reduce the monthly outlay for many. But even paying 35% of the premium for family coverage when you don't have a paycheck can be a bite.

Tuesday, March 10, 2009

A malodorous gas behind the smell of rotting eggs has been found to play a key role in giving men erections. Scientists believe the discovery could lead to the development of a male impotence drug to rival Viagra.

And it seems they are dead serious.

The whiff of hydrogen sulphide – a gas not traditionally associated with lovemaking – accompanies the biological degradation of sulphur-containing substances. It also belches from the exhausts of cars fitted with catalytic converters.

So if you don't have any rotten eggs, find an exhaust pipe.

Yeah, that always get's me in the mood.

The discovery that hydrogen sulphide gas helps penile erection mirrors the earlier discovery that another gas, nitric oxide, is involved in a similar biochemical process. That led to Viagra being used as an anti-impotence drug.

What, exactly, does that mean? As we've discussed before, it's just not cost-effective for a small employer to contract out this kind of administration, but it would be nice to know what, exactly, is going to be required of him in the event a former employee (exployee?) becomes eligible under this new program. Then, too, there are budget considerations regarding how far back the employer will need to pay.

So I poked around the DOI and DOL websites for a bit, but was unable to find anything helpful. The phone seemed to beckon me, and so I called Columbus and ended up speaking with a very nice (if befuddled) gentleman from the DOI. After introducing myself, I explained why I had called, and what had me confused. Then, I asked what it means that an employer is "required to send a notice to former employees?"

The answer was not comforting: "we really don't know yet; the legislature is working on it now." The problems include the fact that Ohio's current coverage continuation law runs for only 6 months, while COBRA/ARRA goes for up to 9. So those two have to be reconciled.

Another problem is that there's never really been any formal notice required on the state level; that is, it was up to the employee to seek out coverage. But the new law has this pesky employer requirement, which begs the question we've already mentioned. It seems to me that, with the clock already ticking, this would have been resolved and implemented. But of course, we don't want to confuse governance with common sense.

A related problem is the next sentence: "Former employees will have from the first day they are eligible until 60 days after receiving the notice to enroll." The way I read that, if one became eligible on, say December 1st, but the notice isn't received until, say April 1st (being generous and/or optimistic), how is this going to help the former employee, who now has to come up with 5 months of premium (well, 35% of premium) when they've potentially been unemployed the whole time? And, of course, the employer's 65% liability is at issue, as well.

I hate to keep saying "we'll keep you posted," but as this continues to evolve, that's the best we can do.

UPDATE: In the comments, FoIB Chad (co-blogger at Tusk and Talon) informs us that:

ARRA does require the employer (whether subject to COBRA or state continuation) to send notices to employees terminated between 9/1/08 and 12/31/09. A model notice is due to be issued by the US DOL on 3/17. For those who did not elect COBRA, coverage would be effective for coverage periods starting 2/17 or after (or 3/1 if coverage is monthly). Unlike normal COBRA, coverage is not retro to the qualifying event, rather only to the 2/17 or 3/1 date. ARRA generally does not modify state law as far as the duration of coverage.

So the coverage elected in OH should still only last for 6 months from the date of the event (e.g., if the event was 5 months ago, the EE would only get 1 month of coverage from 3/1 to 4/1). Employers/Carriers will only be able to claim a subsidy for the 6 months or less of coverage extended under OH's state continuation law. There are lots of other nuances but I'd be surprised if the DOI provides any assistance beyond leaning on your carriers to figure out, and do, whatever it is they are supposed to do.